UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: 11x Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 211  
Subject: Re: 1999 Looooong post. Date: 5/25/2004 12:34 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
I would say I was astounded by the accuracy of the candlestick patterns throughout 1999. THe first part until October 1999 was up, down, up, down, and candlestick patterns tended to call the bottom very well. This was when I first began researching candlesticks and I posted what I found trying to generate interest in them but for the most part it seems candlestick charting isn't as popular as other forms of trading. I tried to find generalizations, like "Candlesticks work best when...." but could never find any. I can only say it's worth watching the volume of the stocks as well and this isn't really pointed out in Nison's books too much, probably because he follows futures. I will tell you however candlesticks served me well in 1999 and mid 2000 but in August and through October 2000 I got whipsawed dramatically and it was a negative year because of the three bad months. 2001 was an up year, mostly through shorting, then I closed these trades and just went flat for a long time. In Sept 2002 I began holding S&P and Nasdaq funds because it felt like a bottom with what was going on.
The charts I provided in my earlier post are for reference to see how accurate the interpretations were.. note the date of the posting and the dates in the chart.

I did note some problems candlestick charting provided, I think I got a good first impression of them from 1999, but found problems later on, mostly in the final rush before the crash, candlesticks would give reversal patterns on certain stocks, but they would continue to rise, this took me out of a winning position.

If you look at this chart in early 2000, on the last few days you will see bearish patterns after a long rise:

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=12%2F25%2F99&enddate=2%2F23%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=1174&mocktick=1


But OOPS!!! The market continued to rise and then give another bearish signal:

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=12%2F25%2F99&enddate=2%2F23%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=1174&mocktick=1

And that bearish signal was pretty much the top of the market, the market retreated and gave a hammer and then testing the low of the hammer a few days later, followed by the last rise.

Now the last rise saw a large fall down out of nowhere. I cannot recall the % changes but it was a few days of roughly 10% in a row if I believe. One thing I have learned and can almost go by as a rule of thumb, well, I learned you can never take a rule for granted, but rarely is a large down day the end of a fall, it's usually followed by more falling prices. That's why when I see own a stock and it falls by a large amount I sell it.


http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=3%2F12%2F00&enddate=4%2F1%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=3272&mocktick=1

This can be illustrated here:: This was the first attempted rally after the initial fall. We had a hammer and a few up days, a large down day followed by continued selling. Again I cannot remember the % changes but I think it was like -7% or so.

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=3%2F12%2F00&enddate=4%2F1%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=3272&mocktick=1

This was the first stabilization after the crash. You will see a bullish pattern, not quite a Bullish Engulfing because the white bar does not rise above the previous day's open. I will have to review the names of the patterns. But do you see the reversal pattern on 4/14 and 4/15? What is that called again?



http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=4%2F1%2F00&enddate=4%2F30%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=3181&mocktick=1


And then we got into very volatile sideways movement, I cannot remember what I was doing then.

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=4%2F1%2F00&enddate=4%2F30%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=3181&mocktick=1

September was when I ran into problems. I took longs with the bullish engulfing, got stopped out a few days later, went long again a few days later with a hammer,

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=9%2F30%2F00&enddate=10%2F30%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=9384&mocktick=1



Saw that signal fizzle out, got a doji morningstar type pattern,

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=10%2F20%2F00&enddate=11%2F30%2F00&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=6987&mocktick=1

And saw that fizzle out, all because I did not see a candlestick pattern calling a top all the way down, but a steady slide down with a few reversal patterns mixed in I jumped on.

So I got mixed up in a few downtrends in the latter part of the year that resulted in losses. So if the market goes one way month after month after month yes, there will probably be candlestic reversal patterns that don't pan out. That's what I have found. For some reason I insisted on staying on the long side in the latter part of 2000. BTW I first got into candlesticks by a person here named TopTick that came out of nowhere and called the bear market bottom in 1998 by mentioning the "Hammer" on the last day of the bear market.


See here?

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=8%2F15%2F98&enddate=10%2F9%2F98&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=2124&mocktick=1

That was some hammer, look what it was followed by:::

http://chart.bigcharts.com/bc3/intchart/frames/chart.asp?symb=comp&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=2&state=9&sid=3291&style=320&freq=1&startdate=10%2F9%2F98&enddate=2%2F10%2F99&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=9593&mocktick=1









Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement